It may well be that it is a seasonal norm, I have noticed a heightened rush to sell homes soon after Easter in the areas of California that I track.

As of Friday afternoon, there were 2673 active listings for Single Family Homes (the highest that I recall in the past several years) and there were

609 sales pending, giving an Active Listings to Sales Pending Ratio (LPR) of 4.4. During the summer of 2004, I recorded LPR of 1.4-1.5. Hence, the supply presently is three times the supply, for a given level of demand (sales), compared to the period when things were hot. I would think that an LPR of 2-3 is a reflection of normal supply-demand market.

To compare the current levels of Listings and Pending Sales we have to go back to early November 2005. On 11/01/05 there were 2521 Listings and 623 Sales Pending. So, we have a worse situation now in May than in November, which is considered a start of a very slow seasonal period. During November and December, there were massive delistings and the Active Listings dropped to 1587 and Sales Pending bottomed at 310 in early January. During the Easter weekend, there were 2266 Listings and 623 Sales Pending.

Hence, we have 400 more Active Listings and the sales have definitely not picked up. Sales are mostly flat for the past four weeks. The median price of sales pending is flat for the last three months. And we are talking about the three-month period of the year that has shown the largest price gains for the last several years. BTW, the price change for the 9 months ending in Mar’06 (the latest report) was 0.0%.

Santa Cruz County is an example of what I call a dead market with LPR of above 5 for quite some time now. There are 835 Active Listings and 160 Pending Sales, currently. There are signs of price reductions. In a market like this people are taking a chance to see if they can sell at what are still high prices despite some drop in price. If someone really needs to sell in this kind of market one must price 10-15% below what he, or she, thinks is the “fair market price” based on comps that are mostly the past prices, or values, and don’t reflect the current reality.

A son of my friends has a home on the market and he has dropped the price once. That may not be enough and he might have to drop the price again unless he gets lucky. Even though he is very conservative and a competent police officer, Bankrupters’ agents had no problem in loading him with unnecessary refinancing and a huge loan with the cash he didn’t need. Since the cash in the bank that he got as a result of refinancing is earning less than what he is paying, Bankrupters are essentially making money by loaning him his money! Bankrupters’ agents, of course, had different plans for him to use the money; why not invest in real estate, for example.

From Apr’03-Jul’05 the median home prices in Tehachapi Area doubled. So, it was a very hot area, not unlike nearby Bakersfield, and has now suddenly caught a cold spell, or a deep freeze. A year ago, the LPR was as low as 1.1-1.2. Now, it stands at 4.6, a four-fold increase. The town itself is small with several suburbs that are well separated.

One particular suburb, Bear Valley Springs, is a “gated community,” of several square miles of mountainous area with lakes and golf courses. I had told my realtor that the listings there will exceed 100 and they have. At the end of April there were 108 homes listed, while only 4 went into escrow and only 5 closed escrow during the month. Need I say how bad the supply-demand for this area is? Poor sellers are trapped inside the gate (there is only one road with a guard to get in and out; bears have no gate to honor).

Mar-May has been seasonally the strongest period for price gains for the past few years. In Mar’04, 19 out of the 20 regions, as classified by CAR, reported record prices; in Mar’05, the number was 11; and in Mar’06 there was only one region, Riverside/San Bernardino, that reported a record price.

In May’04, all the 20 regions reported record prices. Soon there would be no regions that report record price followed by more and more regions that would report YoY price declines. When more than 10 regions report YoY price decline we can officially say that the bubble has bust.

Another sign is that the leading-edge of the CA Bubble of 2000s, San Diego and Orange County, had price appreciation of 4.6% and 9%, respectively, over the past 21 months (these are not annual rates). Need I point out that San Diego is considered among the best places to live with a great weather. Nice weather doesn’t pay the bills, as I like to say, or mortgages. The most striking thing about the past 21 months is that worst locations in California have gained the most in price and the best locations have done very poorly. I am sure that the “Location, Location, Location” Dupes have an explanation. Such mantras are meant to turn people into dupes and to stop them from proper examination of an issue. Politicians and promoters of all manners thrive on mantras. People love to repeat mantras to support their point-of-view and to shut off the debate.

At the very end of a boom, the garbage rises in demand! For example, San Bernardino, one of the most crime-ridden cities in the US, is riding high in housing price appreciation.

Population growth is one of the major contributors to the growth of the economy. SF Bay Area has counties with the lowest population growth. It simply doesn’t bode well for the future economic growth as well as the housing prices. The area has been the biggest beneficiary of what I call Fraud Money, via Scam Options, and when that money runs out, or the source dries up, the area will suffer the worst depression within the state. Fraud and Scams can only support prosperity for so long. Californians learned nothing from the state revenue bust of 2001-02, due to the Tech Bubble burst, that forced the recall of Gov. Gray Davis. The Housing Bubble burst might be worse and terminate the career of the Terminator.

There are very few true entrepreneurs is California these days (they are eying China, Eastern Europe and India). The state is filled with Crooks, including the most reckless Bankrupters, at the top and speculators in the middle ranks. The residents of the Golden State have very little in gold, are loaded with more housing than they need, and a mountain of Debt. The set up is complete for a bust not seen here since the gold rush. The 89% housing price drop recorded in San Diego during the Nineteenth Century (I doubt that weather was any less appealing) might be repeated in many areas.

Jas